Fears have been voiced for the future of a proposed £27 million new college in Birmingham after the Government demanded a public inquiry.

Joseph Chamberlain College in Balsall Heath should have moved into a modern, purpose-built facility last September.

But the proposed site, on land adjacent to its existing premises on Clevedon Road, was rejected after being referred to the Secretary of State in 2002 following opposition from local residents who claimed it would, among other things, destroy park space and lead to extra traffic congestion.

The college submitted an alternative scheme to construct its new home at Haden Circus by the Highgate/Belgrave Middle-way roundabout.

That proposal, approved by Birmingham City Council, involved Standard Life Investments buying the original site.

Due to the size of the company's plan to develop a retail complex, council planners again were forced to defer to the Government for approval.

The Office for the Deputy Prime Minister has demanded a public inquiry into the project. No date has been set for the inquiry.

David Cragg, executive director of the Learning and Skills Council, which is providing a third of the funding for the college, said: "We are deeply disappointed.

"The public inquiry is a blow to the college and the LSC."

No one at Joseph Chamberlain College was available for comment.

Education chiefs believe the college, built in the 60s, is so dilapidated it is beyond repair.

The public inquiry is likely to uncover renewed local opposition.

Concern has already been expressed at Standard Life's plan to develop a "bulky goods" retail complex at Joseph Chamberlain's old site.

Dick Atkinson, chief executive of the Balsall Heath Forum, said: "This is a huge commercial development that is being talked about right on the edge of a residential area and is not necessarily a good idea."